Optimistic outlook for agribusiness

Agribusiness investors remain comparatively optimistic despite the volatility in the equities markets, according to the latest Commonwealth Bank Agri Indicators Report released this week.

The February report suggests the outlook will be good over the next 12 months, with the consensus forecast return likely to be around 40 per cent.

Commenting on the data, Commonwealth Bank agribusiness executive director Jon Sutton said the signals were pointing towards the growing strength of the agribusiness sector.

“Although we can’t guarantee such a precise result in one year’s time, the important point for investors to note is the relative strength of the agribusiness sector compared to the broader market, and also that this strength seems to be increasing over time,” he said.

Sutton said Australia was well placed to take advantage of the growing demand for food and energy produce in emerging Asian markets and this was one of the major factors contributing to the sector’s prosperous outlook.

He said the bank’s February Agri Indicators Report also revealed that while the agribusiness sector had not been immune to the issues impacting the broader market, it had continued to be much more resilient, falling just 2.4 per cent over the last month compared to 7.3 per cent across the broader S&P/ASX 200 Index over the same period.